SASREF works with SAP to realise 'digital refinery'

SASREF’s digital transformation journey through the Tamkeen project finds huge success

Tags: Digital transformationSAPSAP Middle East and North AfricaSaudi ArabiaSaudi Aramco ( Aramco Shell Refinery Company
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SASREF works with SAP to realise 'digital refinery' In order to prepare for what is coming in the future, we had to have a platform, an enabler, in order to transition towards digitisation, says Al-Qahtani.
By  Alexander Sophoclis Pieri Published  October 15, 2017

Located in the heart of Jubail Industrial City in Saudi Arabia, the Saudi Aramco Shell Refinery Company (SASREF) is one of the largest petroleum refinery companies in the Kingdom of Saudi Arabia. A joint venture between the Saudi Arabian Oil Company and the Shell Oil Company, SASREF today maintains a workforce of around 1,000 employees and reportedly processes over 305,000 barrels of oil per day.

While part of an industry that has traditionally taken a measured approach when it comes to information technology, SASREF is one of the few to have embarked on a digital transformation journey.

Initially conceived in early 2014, the project's primary objective was aimed at streamlining and transforming the brand into a future-proof business that would be capable of capitalising on current and emerging technologies. Project goals also included improving visibility across operations, as well as enhancing both flexibility and agility.

"SASREF realised that the time had come to become a fully digital refinery. This is in preparation of a new era of digitisation driven by technologies, such as Internet-of-Things and Big Data." comments Hussain A. Al-Qahtani, President of SASREF.

"In order to prepare for what is coming in the future, we had to have a platform, an enabler, in order to transition towards digitisation."

To help facilitate the digital transformation of its infrastructure and its business processes, SASREF partnered with global enterprise technology provider SAP.

Opting to fully transform the business in one massive undertaking, as opposed to conducting incremental improvements over a long period, SASREF and SAP formed the Tamkeen program. In addition to revamping the entirety of SASREF's IT infrastructure and forming the foundation to support IT-OT integration, the program also aimed to make IT more independent through the fostering of in-house expertise.

This was quickly followed by the launch of a business process management initiative that begun in May 2015, and culminated with a go-live date on the 2 November 2016.

"We wanted to improve everything, be it HR - our intellectual asset - or our business processes, maintenance, operations, and planning," explains Al-Qahtani.

As part of its digital transformation journey, the company introduced a wide range of SAP solutions across its back-end operation. Beginning with its IT architecture, SASREF was able to reduce the number of systems from four down to two using the SAP HANA Platform.

SASREF also deployed the SAP Business Suite powered by SAP HANA, which in addition to supporting core business processes, also integrates directly with operational systems. The latter is accomplished through the use of the SAP Manufacturing Integration and Intelligence (SAP MII) application.

To ensure data continuity, SASREF's management opted to automate disaster recovery and replace the outdated database with SAP Adaptive Server Enterprise and the SAP HANA database.

To facilitate better management of its financial resources, the company deployed SAP S/4HANA Finance solution, while to improve management of its workforce, it adopted both SAP ERP Human Capital Management and SAP SuccessFactors solutions.

The Tamkeen program also saw the launch of SASREF's Customer Center of Expertise (Customer COE) organisation, which was created in close collaboration with consultants from SAP. Certified by the global enterprise technology provider, the Customer COE, along with the various IT improvements, SASREF achieved significant savings through this initiative.

"For the first time, we have full IT-OT integration. The operation processes are communicating directly with the core business processes. These are communicating in real-time, and this has enabled management to have better analysis of each process and make better decisions," explains Al-Qahtani.

Elaborating further, SASREF's president shares that several benefits have been realised with SAP's solutions that range from real-time inventory visibility to an improve lifting scheduling. Additionally, the integration of the various business functions under one platform has enabled SASREF to fully align correct all its master data, as well as integrate plant processes directly to the financials.

The project has also had a positive impact on the life expectancy of assets through real-time monitoring, and has enabled SASREF's maintenance teams to engage in predictive maintenance.

"There are two levels. The first level, we fully integrated the vibration monitoring system to the core maintenance solution. Now we are able to monitor the machine performance. Based on the condition of the machine, we can predict the required actions or maintenance activities for those machines," explains Al-Qahtani.

"The other layer has advanced predictive maintenance or advanced reliability maintenance, and this is where we are planning to fully integrate it with the machine, along with the supported solutions for analytics that can help predict failure."

SAP S/4HANA Finance adds several refinements that helps SASREF's finance team to lessen the frequency of errors when processing payments, while also speeding up the process substantially. An example of the latter lies with SASREF monthly financial results and business performance indicators, which once took days to generate, but can now be produced in two working days, which is a great achievement.

The level of integration of finance has also had a positive impact on the supply chain process. From end-to-end, the entirety of the process from contracting to award and closure has been streamlined, resulting in procurement cost savings and improved on-time payments to suppliers.

While the impact of the SAP implementation is beginning to bear fruit, it is important to recall that the deployment was a lengthy and complex one. Both SASREF and SAP worked closely together as a team to not only devise an infrastructure suiting the demands of a digital refinery, but also tackle the various challenges associated with such an endeavour head on.

"One challenge is of course the timeline. The timeline was aggressive. Usually companies do it in many phases and takes years to complete the same coverage," explains Yaser Al Jughaiman, SASREF business transformation SAP Lead.

"In terms of organisational limitation in SASREF, because we are very lean in manpower - while very effective and efficient - resources were a challenge to engage in that level of magnitude of the project."

"Third challenge is really change management. Changing the existing business processes and at the same time, how to adopt those and convince the organisation to accept the new business processes."

To alleviate resistance against the new platform, the business transformation lead explains that the company engaged in extensive training preparation with each division learning the ‘ins and out' of their respective sections. In this regard, SAP's team of experts were on hand to assist and conducted several knowledge transfer exercises with SASREF's team.

Prior to the go live date, the company also conducted a training need analysis (TNA) evaluation across the entirety of the organisation.

Conducted in-house, from top to bottom and horizontally across each layer, the TNA evaluated how various processes were handled by the staff. In those areas where efficiency and accuracy were deemed under standard, additionally training sessions were assigned as necessary.

Looking to the future, Al Jughaiman believes that there are several disruptive technologies that are quickly gaining traction within the oil & gas industry that will have a substantial impact on day-to-day business.

"I think the new disruptive technologies are going to bring change to the industry. Robotics is one, including the unmanned aerial vehicle (UAV), which is going to be a very useful tool. In fact, some of the key players in the oil industry are utilising these technologies," comments Al Jughaiman.

"Data analytics is also important. These are the trend towards the industry. This is what I expect in the next five years," he adds.

When pressed on SASREF's own plans for the future and whether any additional technologies are currently being considered, Al Jughaiman indicated that SASREF is always keen to explore new technologies and enabling tools such as machine learning and advanced data analytic.

"We are open for any technology implementation. We are watching the market, we are staying up-to-date all the time and whenever there is a new technology that can add to our work processes, add to our margin, then we are ready to evaluate and implement," concludes Al Jughaiman.

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